List of 100 frequently asked Interview Questions and Answers on Management! Also learn about:

  1. Business Manager Interview Questions and Answers
  2. Business Management University Interview Questions
  3. Business Interview Questions
  4. Business Manager Interview Questions
  5. Business Related Interview Questions
  6. BBA Interview Questions

Management Interview Questions and Answers # Business Manager Interview Questions and Answers:

Interview Question # Q.1. What is management?

Ans. Management is the process of working with and through others to achieve organizational objectives in a changing environment. Central to this process is the efficient and effective use of limited organizational resources.

1. Running the Show Efficiently:

By efficient, we mean utilizing the resources wisely and in a cost effective manner. It is nothing but doing things right, i.e., not wasting resources. For example, a firm like Toyota Motor Corporation that produces high quality products at low costs is efficient. However, it is not enough just to be efficient. The management is also concerned with being effective.


2. Achieving Goals Effectively:

By effective, we mean making the right de­cisions and successfully implementing them. Effectiveness is nothing but doing the right things. A firm could very efficiently produce big screen black and white televisions with few options and limited capabilities but still not succeed because black and white televisions are no longer popular.

A firm that produces products that no one wants is, therefore, not effective. Thus, efficiency is concerned with the means of getting things done; effectiveness is concerned with the ends or attainment of organizational goals. Successful organizations, in general, are both efficient and effective.


3. Emerging as a Winner in a Changing Environment:

An organization that fails to monitor its environment and to change in order to keep pace with the environment is doomed to failure. Successful managers are the ones who anticipate and adjust to changing circumstances rather than being passively swept along or being caught unprepared.

Successful managers, according to Peter F Drucker, do not wait for the future; they make the future. Every day managers—in one way or the other—solve complex problems, turn organi­zations around and achieve stunning performances. To be successful, every organization requires skilled managers.

Interview Question # Q.2. Tell me about the process of management.

Ans. The Process of management involves the determination of objectives, putting them into action and achieving the desired goals. Management process is the methodology of getting the things done. The process, in general, is defined as a series of actions or operations (functions) conducting to art end.


The logic of the management process is that particular functions are performed in a sequence through time. Whatever functions are performed by a manager and the sequence in which they are performed, is designated as Management Process.

Management process involves:

1. Planning,

2. Organising,


3. Actuating, and

4. Controlling, for achieving business goals.

1. Planning:

Planning involves the formulation of what is to be done, how, when and where it is to be done, who is to do it and what results are to be evaluated.


Planning means looking ahead, it is mental work, it is selecting from among many choices following the procedure given below:

i. Lay down the company objectives/ targets.

ii. Collect and classify the information relating to company objectives.

iii. Develop alternative course of action to do the things.


iv. Compare the alternatives in terms of objectives, feasibility and consequences.

v. Select the optimum course of action yielding maximum benefit/gain.

vi. Establish policies, procedures, methods, schedules, programmes, systems, standards and budgets for the optimum course of action selected.

2. Organising:


After determining the course and make-up of action, the next step, in order to accomplish the task, is to distribute the necessary work among the working groups.

The process of organising involves:

i. Divide the work into Component activities.

ii. Assign people to task (component activities).

iii. Define responsibilities.

iv. Delegate authority.


v. Establish structural relationship (i.e., organisation structure) to secure coordination.

3. Actuating (move to action):

Actuating means carrying out physically the activities resulting from planning and organising.

The process of actuating involves:

i. Provide effective leadership.

ii. Integrate people and tasks and convince them to assist in the achievement of the overall objectives.


iii. Ensure effective communication.

iv. Provide climate for subordinates’ development.

4. Controlling:

Controlling means checking up (or follow up) t6 ensure that the planned work is progressing as per schedule and if not, then to apply corrective action to achieve the pre-determined objectives.

The Process of controlling involves:-

i. Observe continuously and study the periodic results of performance.


ii. Compare this performance with the present standards.

iii. Pinpoint deviations if any.

iv. Ascertain the exact causes of deviations.

v. Initiate and implement the corrective action.

Interview Question # Q.3. What are the different levels of management?

Ans. We have been using the term manager to mean anyone who gets the work done by subordinates and manage other organizational resources. However, we can categorize the managers on the basis of different tasks and responsibilities.

1. On the Basis of Tasks:


A manager can be a functional manager or a general manager.

The functional manager is responsible for only one organizational activity, such as production, marketing, sales or finance. The people and activities headed by a functional manager are engaged in common set of activities.

The general manager oversees a complex unit, such as a company or an independent operating unit. He is responsible for all the activities of the unit, such as production, finance, marketing, etc.

2. On the Basis of Responsibility:

A manager can be junior manager, middle line manager, or a senior manager.

The ‘typical’ junior manager will be supervisor of a unit or the senior member of a team. His role is to co-ordinate the work of non-managerial employees and to have direct responsibility for machinery and materials. Junior managers are expected to be skilled at both overseeing work and doing it.


Middle managers are usually accountable for the work of junior managers and they in turn report to senior management. They will have a wider remit than the supervisors reporting to them and spend much more of their time on management functions rather than in an operational role. They may step into an operational role from time to time but they may be managing areas of expertise in which they have some knowledge but not at an operational level.

Senior managers are the executives, at the highest level of the organisation, responsible for its overall direction and co-ordination and for directing its major activities. Senior managers are responsible for company-wide planning, organising, directing and con­trolling, and for providing strategic leadership to the company.

They are also concerned with the demands imposed on the organisation by outside influences such as customers and suppliers. Above all they are responsible for the overall direction and success or failure of the organization.

Within these three layers of management there may be numerous intermediate stages, particularly in middle management.

Interview Question # Q.4. Elaborate the areas of management.

Ans. Irrespective of their levels, managers may work in various areas within an organization Exhibit 16.1 shows different areas of management.

Common areas of management are:

1. Marketing

2. Finance

3. Operations

4. Human Resources

5. Administration and

6. Others

1. Marketing Managers:

Marketing-managers work in areas related to the marketing function- getting consumers and clients to buy the organization’s products or services. These areas comprise new product development, promotion, and distribution.

2. Financial Managers:

Financial managers primarily deal with an organization’s financial resources and are responsible for activities such as accounting, cash management and investments.

3. Operations Managers:

Operations managers are concerned with creating and managing the systems that create an organization’s products and services. They are typically responsible for production control, inventory control, quality control, plant layout, and location selection.

4. Human Resource Managers:

Human Resources Managers are responsible for recruiting and selecting employees, involved in human resource planning, training and developing organization’s human resources, designing compensation and benefit systems.

5. Administration:

General Managers are not associated with any particular management specialization but possess some basic familiarity with all functional areas of management.

Interview Question # Q.5. What are the functions of a supervisor?

Ans. As a manager, supervisor has to perform the following functions:

1. To schedule work for its even and steady flow.

2. To assign work to different workers accordingly to their abilities.

3. To provide proper working environments to the workers.

4. To provide leadership to the workers.

5. To elicit their willingness to work for the achievement of group objectives.

6. To control the performance of workers.

7. To motivate the workers by giving them various incentives.

8. To take corrective action, whenever necessary.

Interview Question # Q.6. What is the importance of direction in an organisation.

Ans. Direction is both complex and important. It is complex because it deals exclusively with people. While dealing with people, a manager quite often than not performs a tight-ropewalk. It is not a simple feat for the manager to direct people at work. Direction is important because in its absence subordinates may not perceive the organizational goals. Subordinates must be communicated what the organizational goals etc., what the employees should do to achieve them, how they should do their jobs etc.

Direction is important because of the following reasons:

1. Directing bridges the gap between managerial decision’s and actual execution by people.

2. Direction is the ‘make-happen’ phase of management.

3. Direction is an integrating function of management as it effectively integrates the individual goals with organizational objectives. In the absence of integration the individual goals may be incongruent with the fundamental organizational objectives. As Koontz and O’Donnel concepts, “people are not primarily interested in enterprise objectives; they have objectives of their own” In order to manage effectively a manager should integrate the individual goals with the organizational objectives.

4. Direction facilitates the introduction of changes in an organization. People have a tendency of resisting change in organization; they need direction to accept and implement changes in the right direction for the betterment of an organization.

Interview Question # Q.7. What is the difference between planning and controlling?

Ans. Planning:

a. Focus- Impersonal, long range problems

b. Relies on- Estimates

c. Time – Top Management’s top priority item

d. Structure- Less Structured

e. Evaluation- Difficult, takes time to visualize the impact.


a. Focus- Personal, immediate issues

b. Relies on- Specific data

c. Time- Operating and lower level people spend more time on this

d. Structure- Highly Structured

e. Evaluation- Results visible, especially when situations are sta­ble and not so complex.

Interview Question # Q.8. What are the characteristics of management?

Ans. The following are the important characteristics of management:

1. Management makes the people realize the objective, the group and directs their efforts towards the achievement of objectives. So management is a group activity.

2. It is concerned with the establishment and accomplishment of objectives. So management is goal oriented.

3. Management is factor of production that is required to coordinate the factors of production. For the accomplishment of pre-determine goals.

4. The fundamental principles of management are applicable in all areas of organized effort. So it is universal in character.

5. Another important feature of management is that it is needed at all levels of the organization e.g., Top level, Middle level and Supervisory level.

6. Management is a distinct process performed to determine and accomplish stated objectives by the use of human beings and other resources. As a process it consists of functions like planning, organizing, staffing, directing, coordinating, motivating and controlling. So it is a distinct process.

7. Management consists of getting things done through others i.e., dealing with people. So management is a social process.

8. Management cannot perform in the absence of authority. An efficient management cannot be possible without well-defined superior sub-ordinate relationships. So management is a system of authority.

9. Management is a dynamic function and it has to be performed continuously.

10. Management is a science because it has developed certain principles which are of universal application.

11. The results of management depend upon the personal skill of managers and in this sense management is an art.

12. Management is recognized as a profession, because it is being taught as a separate subject or discipline.

13. Management is intangible i.e., it can be felt in the form of results and not seen.

14. Management is multidisciplinary.

Interview Question # Q.9. What do you mean by decision-making?

Ans. Decision-making means selecting a course of action out of alternative courses to solve a problem. Unless there is a problem, there is no decision-making. Decision-making and problem-solving are interrelated. It is the process through which managers identify and solve organisational problems.

Decisions may be major or minor, strategic or operational, long-term or short-term. Decision-making is done for each functional area at each level. The importance of decisions, however, varies at each level. Long-term, major and strategic decisions are taken at the top-level and relatively short-term, minor and operational decisions are taken at lower levels.

Decision-making precedes every managerial function. Decisions like what goals and what ways to achieve them (decisions before planning), designing the organisation structure and span of management (decisions before organising), best match between job description and job specification (decisions before staffing), incentive system, leadership styles and communication channel (decisions before directing) and techniques of control (decisions before controlling) are taken for smooth running of business operations and its survival and growth. Decision-making is not easy.

All decisions are not based on past behaviour and practices (objective decision-making). Most of the decisions in today’s complex environment are subjective in nature. They are based on managers’ knowledge, value judgment, creativity and innovative abilities. Managers do not make same decisions in same situations. It is situational in nature and depends upon managers’ psychology and perception of the situation. Decision-making is a modest attempt to match environmental opportunities with organisation’s strengths. It is based on forecasts and assumptions about environmental factors.

Following definitions are given by some management thinkers:

“A decision is a conscious choice to behave or to think in a particular way in a given set of circumstances. When a choice has been made, a decision has been made.” — J. W. Duncan

Decision-making is “the selection of a course of action from among alternatives; it is the core of planning”. — Koontz and Weihrich

Decision-making is “the process through which managers identify organisational problems and attempt to resolve them”. — Bartol and Martin

Interview Question # Q.10. Classify organisation formats.

Ans. Organisation formats are classified as follows:

I. Classical organisation formats

II. Modern or contemporary formats

I. Classical Organisational Formats:

These formats view organisation “as a process of construction in which a great number of small work units are built into jobs, departments, divisions and finally a whole institution.” —Keith Davis

These formats group activities into smaller units and create departments. Organisation structures are planned prior to appointment of people. Interaction amongst people and satisfaction of their social needs are ignored in these formats. Popular forms of classical formats are line organisation, line and staff organisation and functional organisation.

II. Modern or Contemporary Organisational Formats:

Classical formats of organisation support division of work, specialisation and creation of departments. They ignore the importance of horizontal relationships amongst people. Inter relationships and social values is an important part of task relationship which cannot be ignored while framing the organisation structure. The modern formats view organisation as “a process of analysis by which a particular area of work is subdivided into divisions, departments, and finally jobs assigned to particular people.” — Keith Davis

While basic design of organisation structure comes from the classical format, modern formats emphasize on a flexible and environment-friendly structure.

The popular forms of contemporary organisational formats are project organisation, matrix organisation and networking organisations.

Interview Question # Q.11. What are the benefits and difficulties of social audit?

Ans. Benefits of Social Audit:

I. Social performance of each company can be evaluated in an objective way.

II. Awareness and commitment levels of each employee toward social projects improves.

III. Social audit boosts up the image of a company.

IV. Every stakeholder comes to know about how socially active ad responsible a business.

V. Business can quantify the benefits and key risks in undertaking socially relevant projects.

Difficulties of Social Audit:

I. Accepted ways and means to carry out social audit not readily available.

II. It requires firm commitment from one and all, which is missing in most cases.

III. Which items to be included in social audit is a question over which there is no complete agreement.

IV. Every company is not very open about revealing how socially responsible and active it is.

V. Difficult to classify activities into two compartments- social and non-social.

Interview Question # Q.12. Differentiate between authority and responsibility:

Ans. Responsibility is the task assigned to a person and authority is the right to issue directions to get that task done.

Authority and responsibility differ from each other with respect to the following:


1. Concept – Right to issue directions

2. Delegation – It is delegated from superior to subordinates

3. Nature of flow – It flows from top to bottom


1. Concept – Obligation to perform the assigned task.

2. Delegation – The superior continues to remain answerable to his superior for tasks assigned to subordinates.

3. Nature of flow – It flows from bottom to top.

Interview Question # Q.13. Discuss the features of MIS.

Ans. Effective management information system has the following features:

1. Timeliness – Up-to-date and timely information is needed by managers to make decisions. On-line facilities provide access to latest information with respect to different functional areas.

2. Accuracy – Not only should information be provided on time, it should also be accurate. Wrong information leads to wrong decisions. MIS helps in providing accurate information.

3. Relevance – MIS has access to huge data with respect to various business activities. Data relevant to the decision-making process is used by managers and the rest is left out.

4. Concise – The data is related only to that area or activity with respect to which decisions have to be made.

5. Completeness – While picking up data, managers collect complete information relevant for solving the problem.

Interview Question # Q.14. What are the objectives of staffing?

Ans. Staffing function will have the following objectives:

1. To achieve organization’s objectives by having most valuable work force.

2. To enhance the commitment of workers towards individual and organizational goals.

3. To create a suitable position in the organization and select a qualified person for that position.

4. It increases the skill and ability of the workers by providing on -the- job training facilities.

5. To develop worker’s abilities to assume jobs of higher skill .competence and responsibility.

6. To create good physical working conditions in the organization to maintain worker’s commitment to jobs.

7. To make use of human resource to achieve organizational objectives.

8. To make workers realize their potential at work and develop them for promotions to higher managerial posts.

Interview Question # Q.15. What are the objectives of coordination?

Ans. The main objectives of coordination are:

1. Harmony of objectives-Coordination is essentially required to enable unity of action, which makes all superior-subordinates in an organisation aligned to common (organisational) goals.

2. Economies to scale and efficiency-The purpose of coordination is economies to scale and efficiency by reducing rework, overwork, errors, wastage, delays and duplication of efforts.

3. Total accomplishment-The degree of accomplishment through coordination between superior and sub-ordinates is significant. Coordination allows work to be distributed between superior-subordinates across all levels in an organisation leading to time and energy savings, and overall satisfaction.

4. Good human relations-Coordination aims at maintaining good human relations and less conflict within an organisation by clearly defining the line of authority and responsibilities.

Management Interview Questions and Answers # Business Management University Interview Questions:

Interview Question # Q.16. What do you mean by organisation structure?

Ans. Organisation structure grows out of departmentation. It “establishes effective behavioural relationships among persons so that they may work together efficiently and gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or objective.” — Terry and Franklin

Organising refers to a whole divided into parts, each part assigned to organisational members, assigning authority and establishing relationships amongst them for collective contribution towards organisational goals. Division of work into smaller units, assigning people to those jobs and defining relationships creates organisation structure. It defines powers that people enjoy by virtue of official positions.

“An organisation structure specifies its division of work activities and shows how different functions or activities are linked; to some extent it also shows the level of specialisation of work activities. It also indicates the organisation’s hierarchy and authority structure, and shows its reporting relationships.” — Robert H. Miles

“Organisation structure is the formal pattern of interactions and coordination designed by management to link the tasks of individuals and groups in achieving organisational goals.” — Kathryn M. Bartol and David C. Martin

Interview Question # Q.17. Tell me about the process of delegation used in an organisation.

Ans. The delegation process essentially consists of three related steps:

(i) The assign­ment of work to people;

(ii) The granting of authority to utilize resources;

(iii) The creation of an obligation to perform.

(i) Assignment of Duties:

The delegator assigns duties. He indicates what work the subordinate is expected to do. While assigning duties the del­egator must be clear in his mind as to what tasks he should assign to his subordinates.

(ii) Granting of Authority:

The granting of authority is the second step in delegation. The delegator must leave enough for the subordinate to operate freely and independently and show results. Charts, job descrip­tions, manuals may be used to clarify authority to subordinates. The purpose of granting of authority should be to let the delegatee know what is expected of him by the delegator.

(iii) Creation of an Obligation:

Once duties are assigned and authority is given to a subordinate, the delegator creates an obligation to perform. This obligation is known responsibility. Thus, responsibility is the moral obligation of a subordinate to perform the duty as required by the su­perior. The delegator, however, remains accountable for final outcomes even after turning over work to the delegatee.

Interview Question # Q.18. Explain me the importance of leadership.

Ans. 1. Directing group activities

2. Better utilization of manpower

3. Source of motivation

4. Developing good human relations

5. Promoting the spirit of coordination

6. Fulfilling social responsibilities

7. Influence the behaviour

8. Creates confidence

9. Increases employee morale

10. Helps in the use of formal authority effectively.

Interview Question # Q.19. What’s your view on the relation between decision-making and planning?

Ans. Planning and decision-making are related to each other in the following ways:

1. The process of planning involves decision-making regarding organisational objectives and plans.

2. Both decision-making and planning require value judgment, creativity and innovation by managers.

3. Plans and decisions are related to a predetermined goal.

4. Planning and decision-making are continuous and pervasive processes. Managers perform them at all levels.

5. Efficiency of planning is largely determined by the efficiency of decisions. Good decisions lead to good plans and vice-versa.

6. Planning and decision-making exploit environmental threats and opportunities to match organisational strengths and weaknesses.

7. Managers plan and decide for every situation—risk, certainty and uncertainty.

8. Decision-making and planning are based on forecasts and assumptions about environmental factors.

Plans, policies, allocation of resources, who will perform what activities, how, when, where are the various questions answered through the rational decision-making process. Decision-making is “the selection of a course of action from among alternatives; it is the core of planning.” A manager more actively makes decisions with respect of managerial functions rather than actually performing these functions. As Joseph L. Massie says, “A manager is oriented towards making decisions rather than towards performing the actions personally; the actions are carried out by others.”

Interview Question # Q.20. What do you mean by the term ‘communication’? 

Ans. The literal term of ‘Communication’ means a mutual exchange of words and information among two or more individuals. The word is derived from a Latin term ‘communis’ which means common. It could thereby mean communication of common ideas. The managerial tools – Planning, organising and staffing also involve communication. It is however, of most significance to organising and directing phases of the management process. Communication means a two-way interaction between multiple individuals.

It can be defined as follows:

“Communication is an exchange of facts, ideas, opinions or emotions by two or more persons.” —Newton and Summer

“Communication is the process of passing information and understanding from one person to another.” —Keith Davis

The definitions thus indicate that there is an exchange of ideas, opinions or emotions by a person who wishes to communicate and this exchange is received by another person or a group in the same spirit. The effectiveness of the exchange and reception of facts, ideas, opinions or emotions however depend upon the means of communication. This can be further managed to ensure that the information is accurate and exactly received by the receivers or recipients.

Interview Question # Q.21. What are the causes of rumours in an organisation?

Ans. Rumours originate because of the following reasons:

1. Poor Communication System:

A poor communication system where superiors and subordinates do not openly share formal information often leads to spreading of rumours. People get information from unauthenticated sources and spread it like wild fire.

2. Pressurise the Management:

When employees want to pressurize management to accept their demands, they often spread false information in the organisation in the hope to enter into dialogue with the management.

3. Mal-Intentions of Employees:

Employees who are not committed to the organisation may spread wrong information in order to cause harm to it.

Business Management Interview Question # Q.22. Explain me the three types of managerial skills.

Ans. According to Robert L. Katz, there are three types of managerial skills viz., technical skills, human skills and conceptual skills.

I. Technical Skills:

Technical skills are the proficiency in working with machines, tools and techniques in human resource management, financial management, marketing management and production management. Managers at all levels should possess technical skills. Those at the lower level should possess more of technical skills whereas managers at the top level possess less technical skills compared to those at middle and lower levels.

II. Human Skills:

Human skills include the ability to work with people tactfully, interpersonal proficiency, ability to build, maintain and work in teams and create an open environment. Managers at all levels should possess these skills.

III. Conceptual Skills:

Conceptual skills include the ability to draw the total, integrated, and comprehensive and the macro view of the company, situations and the ability to develop solutions for the probable problems and challenges. Top level managers should possess more of conceptual skills compared to those of lower level managers.

Business Management Interview Question # Q.23. What is the difference between formal and informal leaders?

Ans. Formal Leaders:

1. They enjoy formal authority over subordinates.

2. They help to achieve organisational goals.

3. They are formally appointed by managers.

4. Employees comply with their orders.

5. They do little to increase morale and job satisfaction of subordinates.

Informal Leaders:

1. They do not have formal authority over subordinates.

2. They help to satisfy individual goals along with formal goals.

3. They emerge out of interaction amongst members of informal groups.

4. Employees are committed to leaders’ orders.

5. They increase morale and job satisfaction of subordinates.

Business Management Interview Question # Q.24. What are the characteristics of decision making?

Ans. (1) Decision making is a continuous and dynamic process.

(2) It is carried out at all levels of management.

(3) The question of decision-making arises only when there are alternatives.

(4) It is the process of selecting a particular course of action from among the alternative courses of action.

(5) Decision making is always purposive, in that decisions should aim at achieving some purposes.

(6) It is an intellectual process supported by sound- reasoning and judgment.

(7) Decision making involves time dimension and time lag

(8) It is situational and related to environment. A decision taken in a particular situation may not be suitable for another situation.

Business Management Interview Question # Q.25. How to make planning more effective?

Ans. Managers have to develop certain remediable measures to overcome the above limitations and to make plan more effective.

Such measures are discussed below:

1. The existence of clear and specific objectives is essential for efficient planning. So managers should develop more clear and specific objectives.

2. An efficient management information system should be developed to make planning more effective.

3. A sound forecasting system must be developed.

4. Planning can be effective only when it has the initiative and support of the top level management.

5. To make planning system more effective suitable and proper planning premises should be developed.

6. Good communication system in the organization helps in effectiveness of planning process.

7. Plans should be kept up to date through periodic review and revision.

8. The planner should conduct form time to time a cost-benefit analysis to ensure that the benefits of planning are more than the costs involved.

9. Different plans must be properly balanced and integrated with one another.

10. Planning must be flexible and well organized

Business Management Interview Question # Q.26. When to adopt a growth strategy?

Ans. There are certain inherent limits to corporate growth and a firm intending to grow beyond a particular limit, should look into the pros and cons carefully before em­barking upon an ambitious growth strategy.

This compels us to examine the issue as to when corporations should look for a growth strategy:

1. Growth must be manageable. It should enable the organisation to stabilise its operations over a period of time and ensure profitability. When an orga­nisation achieves stability after a time, it can pursue growth strategies in the same field or in diversified fields depending on its strengths.

2. Growth must take into account environmental demands. The limitations im­posed by various pieces of legislation (for example FDI limits in print media, banking etc.) must be carefully looked into before going ‘all out’.

Growth, as a matter of fact, should be in consonance with environmental demands. An organisation can grow only to the extent permitted by (all the above factors) the environment. This, however, requires advance thinking and careful plan­ning.

3. Growth should be the natural choice where the environment presents several opportunities and special concessions and incentives are readily available. For example, the government offers special benefits to small sector industries and industries set up in backward areas. Whenever such opportunities exist in the environment, organisations can pursue ‘growth strategies’ diligently.

Business Management Interview Question # Q.27. Explain me the difference between groups and teams.

Ans. A team, on the other hand, may be defined as a small group of people with complementary skills who work actively together to achieve a common pur­pose for which they hold themselves collectively accountable.

The differences between the two concepts may be summarized thus –


1. Performance – A function of what its mem­bers do as individuals

2. Leader – Strong, clearly focused leader

3. Accountability – Individual accountability

4. Meetings – Runs efficient meetings

5. Skills – Random and varied

6. Synergy – Neutral (sometimes neg­ative)

7. Functioning – Discusses, decides and delegates.


1. Performance – Performance includes individual efforts and collective work prod­ucts which are the result of joint, coordinated attempts.

2. Leader – Shared leadership roles

3. Accountability – Individual and mutual account­ability

4. Meetings – Encourages open-ended, active, problem-solving meetings

5. Skills – Complementary

6. Synergy – Positive

7. Functioning – Discusses, decides and does real work together.

A team is more than just a group of individuals working together. Teamwork has a synergistic effect in that the individuals working together achieve more than they could alone. Members share a common purpose which is clear to each team member. Teamwork, in any case, does not just happen, it needs continuous effort. The effort should also be enjoyable, full and should result in a feeling of personal satisfaction for every team member.

Much of this job is done by the team leader who makes them realize that team interests are above personal aspirations. Another feature of the team is that it has a ‘feel’ about it, a sort of teamness. Members exchange feelings, opinions ideas freely, discuss openly and try to learn from each other. There is a pride, a sense of belonging to the team, which members find motivating.

Business Management Interview Question # Q.28. What are the important features of organization?

Ans. The following are the important features of organization:

1. Division of Labour- Entire work of an organization is divided into functions and sub functions. It leads to specialization and helps to overcome wastage of efforts and duplication of work.

2. Common Purpose- The basis of any organization is to achieve some common goal. The structure is bound together by the pursuit of specific and well defined objectives.

3. Communication- For mutual cooperation and understanding of employees, every organization design its own methods and channels of communication.

4. Authority- Responsibility relationship- An organization clearly defines the authority of each position. It specifies who is to direct whom and who is responsible for what result.

5. People- An organization is made up of people who constitute the dynamic human element. Therefore, customs and limitations of people are to be taken into account.

6. Environment- The structure is designed to adapt to the changing environment.

7. Coordination- Organization provides a suitable method to ensure that there is a proper coordination of different activities.

8. Rules and Regulations- For orderly functioning of people, rules and regulations are created in an organization.

Business Management Interview Question # Q.29. What do you mean by result-oriented management?

Ans. Under result-oriented management, manager does not give detailed directives regarding work performance. He dele­gates the authority to his subordinates, gives them definite assignments of result or objectives to be realised. The sub­ordinate is given liberty to decide, within the prescribed limits and organisation policies, the exact work plan and method to achieve the given results.

The subordinate can decide the ways and means to achieve these results. The subordinate is not thrown completely on self-discipline as in Theory Y. He is guided by the limits of company policy. Besides he can approach the manager for expert advice as and when necessary.

The subordinate is given the objective or the desired result, the relevant data for decision-making, the limits of operation and the freedom to operate within that range. He is duly trained. He is accountable for results. His performance is measured in terms of his achievements.

MBO differs from result-oriented management only in one respect. Under MBO we have much greater participation of subordinates in the determination of objectives. In practice, management by objectives, management by results, and work planning and review are similar approaches for motivation to work.

When objectives are clearly and operationally stated, they form the basis for a plan to achieve goals. For instance, the goal is to reduce labour turnover to 5 per cent within two years. Now the attention of the manager is focused on all matters leading to the goal. When each manager assists his subordinates in setting goals and provides the means to achieve them, the firm is using what is termed management by objectives.

Business Management Interview Question # Q.30. Tell me about the criteria for effective co-ordination.

Ans. According to Henri Fayol, a well coordinating organization should satisfy the following conditions:

1. Each department should work in harmony with the other departments.

2. Each department, division and sub-division should be precisely informed as to the share it must take in common task.

3. The working schedules of the various departments and sub­divisions should be constantly attained to the situation.

These three requirements are not always fulfilled and the lack of co-ordination is apparent in the following ways:

(a) Each department knows and wants to know nothing of the others.

(b) Water tight compartments exists between the division and offices of the same department as they do also between different departments.

Management Interview Questions and Answers # Business Interview Questions:

Business Management Interview Question # Q.31. What are the features of organisational development?

Ans. i. It views organisation and mana­gement from systems point of view- an open and adaptive system constantly trying to adjust with changes in the inter­nal and external environment;

ii. Participation of an expert change agent or a catalyst is essential. Management consul­tant acts as a change agent;

iii. OD plans must have full sup­port by top management group;

iv. OD stresses on planning and goal setting through participation. We have a planned change;

v. We have long-range and on-going process of change to alter and modify attitudes, values, opinions, behaviour and performance;

vi. OD planned efforts to increase organisation health and competence concentrate on the use of behavioural sciences for leadership, communication, motivation, group be­haviour, conflict management, and.; inter-personal relations;

Special emphasis is given on participation and orientation toward groups so that we have teamwork and team spirit to assure harmony and growth in the organisation.

Business Management Interview Question # Q.32. What factors determine the span of management?

Ans. The span of management will differ from one individual to another, time to time and place to place. This is due many factors and a consideration of these factors will help a manager to fix a suitable span of management.

(a) Ability of Superior

(b) Capacity of Subordinate

(c) Nature of work

(d) Time available for supervision

(e) Degree of planning

(f) Degree of decentralization

(g) Communication techniques

(h) Staff Assistance.

(a) Ability of Superior:

When a manager has more of skills to guide, instruct and inspire subordinates, he can have a wide span. Similarly, his personality and attitudes will also help in determining his span of management.

(b) Capacity of Subordinate:

If the subordinates are efficient and well trained, they would require less guidance and supervision and the span may be wider.

(c) Nature of Work:

When subordinates perform routine and similar functions, span of management can be wider. When the nature of work is complex and not identical, the span has to be narrow.

(d) Time Available for Supervision:

At the top level management as the time available for supervision is less, the span should be narrow. On the other hand, at the lower level, the span can be wider.

(e) Degree of Planning:

When the subordinates have to follow, standing plans like procedures, rules and policies, then span can be wide. When plans are not properly laid down, span has to be narrow, because subordinates require more clarification, guidance, assistance and supervision.

(f) Degree of Decentralization:

Higher the degree of decentralization, higher is the span. But when authority is not delegated to subordinates, the span is narrow because more consultations and guidance is required. Manager has to take many decisions by himself.

(g) Communication Techniques:

When there is direct and face-to-face communication, the span is narrow because it involves a lot of time. But if modern communication techniques are used, the span can be wider.

(h) Staff Assistance:

A manager can have a large number of subordinates under his control by delegating some work to staff assistants.

Business Management Interview Question # Q.33. What’s your view on the nature of work of sales manager?

Ans. 1. The Administrative Sales Manager:

In a larger company, a sales organisation usually has an administrative Sales Manager. He has to develop the structure of the sales organisation, lay down procedures and policies, direct the staff, hold sales meetings, co-ordinate marketing with other company activities. He is also responsible for planning and control of all marketing activities.

2. The Operating of Field Sales Manager:

He is line manager reporting directly to Marketing Manager or Administrative Sales Manager. He is responsible for management and development of sales personnel. He has to execute the sales plan. A successful salesman usually becomes a field sales manager. He looks after recruitment, selection, training, supervision, evaluation, and control of salesforce. In a small firm, we have a Sales Manager who looks after both administrative (planning) as well as operating (doing) duties and responsibilities.

3. Staff Functions (Thinkers):

Providing advice and service to executives and help them to achieve sales objectives.

Business Management Interview Question # Q.34. What are the essentials of a sound plan?

Ans. L. F. Urwick has summarized the characteristics of a good plan as follows:

1. It should be based on clearly defined objectifies.

2. It must be simple.

3. It should be rational, appropriate and comprehensive.

4. It should provide for a proper analysis and classification of actions.

5. It must be flexible.

6. It must be balanced.

7. It must use all available resources and opportunities before creating new authorities and new resources.

8. There should be proper co-ordination among short term and long term plans.

9. It should be free from social and physiological basis of the planner well as of sub-ordinates.

Business Management Interview Question # Q.35. Differentiate between procedures and budget:

Ans. Procedures:

1. Meaning – Procedures are explicit instruc­tions.

2. Type of plan – Standing plan.

3. Nature – Limiting and restricting.

4. Objective – Provides instructions for comple­tion of a specific task.

5. Scope – Formulated to follow instructions in a routine manner.


1. Meaning – Budget is a statement of expected results in numerical terms.

2. Type of plan – Single-use plan.

3. Nature – States facts and figures.

4. Objective – Serves as a financial standard for measuring actual performance.

5. Scope – Prepared at departmental level as well as for the entire business.

Business Management Interview Question # Q.36. Give examples of corporate social responsibility in India.

Ans. 1. Bajaj Auto:

The company has been running a Samaj Seva Kendra at Akrudi near Pune since 1975 (900 families as members). The Kendra aims at improving the quality of life of its members by providing ed­ucation, healthcare, vocational training, etc. The company also runs the Janki Devi Bajaj Gram Vikas Sanstha near Pune. The Sanstha’s aim is to promote rural development (water management, procuring vital agricultural inputs, feed and vaccination for livestock, sanitation, etc.).

2. Larsen & Toubro:

The Company spends about Rs. 10 crores annually on social projects. In healthcare, it sponsors efforts directed towards birth control; mother and child care; organizes camps to check for tuberculosis, leprosy and special surgery camps along the lines of the Life Line Express – the world’s first ever hospital on rails. L&T also helps the local populace to source seeds, improve soil quality and encourages dairy and poultry development in and around the areas of its work. Finally, as part of its environment enhancement schemes, it assists in afforestation and promoting biogas plants and smokeless chullhas (stoves).

3. Tata Steel:

Tata Steel has been a pioneer in employee welfare in the country and has acted as a beacon for labour law-makers. Tata Steel adopted several welfare measures for employees, decades before they were incorporated in the country’s laws. These include an eight-hour working day, leave with pay, maternity benefit and leave, workers’ provident fund and paying gratuity on retirement.

Beyond employee welfare, Tata Steel has been involved in social projects that include environmental conservation activities, education, vocational training and healthcare for the underprivileged, revival of traditional arts and crafts, and sports development. The company has been running a community development and social welfare department since 1958 that takes care of the educational and vocational training needs of the underprivileged in and around Jamshedpur.

The department acts as catalytic enabler rather than doer, so that the hutment dwellers become more responsible citizens and participate in improving their own quality of life. Tata Steel established a tribal cultural centre to preserve tribal customs, arts and habits. It organizes an annual fair at Jamshedpur which serves as a marketing platform for traditional handicrafts. It has also set up link roads, irrigation facilities, and sports activities for the benefit of society at large.

Business Management Interview Question # Q.37. How to use operations research?

Ans. Operations research (or Management Science) is a scien­tific approach to problem-solving for executive management.

Management scientist or O.R. analyst goes through six steps while analysing management problems:

(1) Formulation of the problem.

(2) Construction of a mathematical model to represent the system under investigation and analysis.

(3) A solution from the model.

(4) Tests of the model and solution derived from it.

(5) Set-up controls over the solution.

(6) Im­plementation of the solution, i.e., putting the solution to work. O.R. analyst uses linear programming for solving problems of allocation of resources.

He uses queuing techniques for solving waiting line problems. Statistical decision theory is used to determine the expected value of each alternative.

Business Management Interview Question # Q.38. What is the difference between line organisation and line and staff organisation?

Ans. Line Organisation:

1. It is concerned with those positions which have the responsibility of achieving the main objectives of the organisation.

2. There are no experts or specialists to assist and advise the line officers.

3. It is not based on specialization.

4. Like a military set up, there is complete discipline in its operation.

5. Generally there is no friction in its functioning.

Line and Staff Organisation:

1. It is concerned with those positions which are meant for providing advice and help to the line officers in the attainment of organizational objectives.

2. There are experts and specialists known as staff officers to assist and advise the line officers.

3. It is based on well planned specialization.

4. There is less discipline as there are two types of officers- line and staff.

5. There is friction between line and staff officers as they are not clear about their respective roles.

Business Management Interview Question # Q.39. What are the rewards and challenges of being a manager?

Ans. Rewards:

i. Create a positive work climate

ii. Offer opportunities to think creatively

iii. Help employees find meaning and fulfilment in work

iv. Support, coach, mentor employees

v. Live with multiculturalism

vi. Gain recognition, status and respect

vii. Influence organisational outcomes

viii. Receive rewards that are in sync with expectations


i. Burn the candle of energies

ii. Face tough challenges on a daily basis

iii. Fight competitive forces, innovate and deliver excellent results

iv. Live with multiculturalism

v. Motivate people and meet their ex­pectations

vi. Remain accountable for results.

vii. Communicate openly and honestly

viii. Exhibit ethical and socially responsible behaviour

Business Management Interview Question # Q.40. What are the objectives of communication?

Ans. 1. To provide information to all concerned

2. To advise people to take action

3. To convey orders

4. To receive reports

5. To convey suggestions and programmes

6. To develop and train employees

7. To give warning to erring persons

8. To raise the morale, confidence, and courage of the personnel

9. To motivate the employees and to induce to act

10. To maintain coordination to ensure the harmonious achievement of individual efforts towards the accomplishment of goals.

Business Management Interview Question # Q.41. Tell me the meaning and features of organising.

Ans. Organising is the managerial tool undertaken for implementing all plans identified for a business. Organising matters for a business because this tool will assemble and arrange all resources required to meet the requirements of these plans for a business.

To organise means arranging things systematically or placing things in an order. Accordingly, as a management tool organising can be defined as “the process of creating a structure for the business that will enable its people to work effectively towards its vision, mission and goals.” It is the process of determining what tasks should be done, who will do them and how they will be managed and coordinated. “Organising is an ongoing and interactive process that occurs throughout the life of business.”

The above mentioned definition emphasises on four main interrelated charac­teristics (in bold) of organising:

1. Organising involves forming a structure, which means arranging elements and building interrelationships between them. Structures have defined boundaries that focus on form and stability within a business to form an organisational structure.

2. The organisational structure identifies tasks, as in, every piece of work should be done in an organisation by human and physical resources.

3. The human and physical resources continuously interact within an organisation to determine whether all defined tasks are completed efficiently.

4. Organising streamlines all interactions between human and physical resources into an ongoing production of products / services, catering to a business’ customer wants.

Organising is the second and one of the most important management tools that formalises the plans identified for a business.

Business Management Interview Question # Q.42. What is the purpose of budgets.

Ans. A budget serve the following purposes:

1. It provides a yardstick for measuring and comparing quantitative performance (financial or non-financial) of different departments, at different levels and at different time periods. Deviations are reported to top managers and remedial actions are taken. A budget thus, acts as a controlling device.

2. It facilitates coordination of resources committed to various projects in the business organisations. It is prepared keeping into mind resource (financial and non-financial) requirements of different departments.

3. It provides guidelines about the resources and expectations of the organisation.

4. It facilitates intra and inter-managerial and divisional performance of the organisation.

5. It boosts employees’ morale to achieve standards laid in the budget.

6. It aims at organisational efficiency by ensuring that actions conform to budgetary standards.

Business Management Interview Question # Q.43. What are the objectives of balanced score card?

Ans. Balanced score card has the following objectives:

1. To translate firm’s objectives into financial and non-financial performance measures. Generally, three to five performance measures are set for each goal.

2. To provide information that reveals performance in all relevant areas (financial and non-financial) in an unbiased manner.

3. To help companies assess their performance and improve the operational plans.

4. To provide fair and balanced view of the organisation so that managers can formulate better plans for future.

Business Management Interview Question # Q.44. How to make budgetary control effective?

Ans. The following guidelines help in making budgetary control effective:

i. Standards – The standards against which actual performance is measured must be framed accurately. Wrong standards can undermine the measurement of actual performance.

ii. Accurate and precise information – As much as possible, information (since it is future-based) on which budgets are based should be accurate. Inaccurate information can defeat the purpose of budgeting.

iii. Timeliness – Deviations must be reported frequently to managers so that timely action can be taken to correct them. Untimely reporting of deviations can result into losses.

iv. Involvement of top management – Budgets must receive the support of top managers if they have to be effectively implemented at lower levels.

v. Flexibility – Budgets should not be rigid. Flexible budgeting can make budgetary control effective. They should allow freedom to use discretion in changing the budgetary allocations, though within defined limits.

vi. Employee participation – A budget which allows employees’ suggestions is more effective than a budget which is prepared by top managers and thrust upon employees for its implementation.

vii. Well-designed organisation structure – An organisation structure with well-defined units, authority-responsibility relationships and communication system make budgetary control system effective. Authority must be commensurate with responsibility for effective implementation of budgetary decisions.

viii. Speedy action – Comparison of actual performance with standard performance should be made at frequent intervals so that speedy actions can be taken for correction of deviations.

Business Management Interview Question # Q.45. Differentiate between delegation and decentralisation.

Ans. i. Delegation is a process while de-centralisation is the end result of planned delegation.

ii. Delegation is between one superior and one subordinate, while de-centralisation is company-wide delegation as between top management and divisions and/or departments.

iii. Dele­gation is a must for management and it creates an organisa­tion, while de-centralisation is optional and appears on the scene when the organisation grows and is large and complex.

iv. The superior or delegator exercises supervision and con­trol over the delegate, while in de-centralisation top manage­ment exercises broad and minimum control.

Management Interview Questions and Answers # Business Manager Interview Questions:

Business Management Interview Question # Q.46. Tell me the difference between leaders and managers.

Ans. A manager is more than a leader. By virtue of his position, a manager has to organise and control the activities of people toward the plan, accomplishment of objectives. Managership, thus, is a wider term. All managers are leaders but all leaders are not managers.

The following attributes of leaders distinguish leaders from managers:

1. Leaders have Followers:

To be a leader, one must have followers. A manager, on the other hand, may have people to supervise, but these people may not follow the manager’s lead. Employees may comply with the manager’s directives, but such compliance may not yield a sense of commitment that leadership creates.

2. Leaders have Emotional Appeal:

Abraham Zaleznik points out the dif­ferences in our expectations of managers and leaders. Managers are expected to be rational decision-makers and problem solvers. Leaders are expected to be charismatic, exciting, and visionary. They are capable of altering the mood of followers, raising their hopes and aspirations.

3. Leaders Meet the Needs of Followers:

Managers and leaders are re­sponsible for meeting the needs of individuals and their organisations however, managers are expected to be more concerned with attaining organisational goals, whereas leaders are expected to be more sensitive to the needs of followers.

Business Management Interview Question # Q.47. What are the different types of budgets?

Ans. There can be a variety of budgets.

These can be broadly classified as follows:

(i) Operating budgets – These budgets relate to operating or daily activities of the business and involve revenues and expenses.

They can be of the following types:

(a) Expense budgets – They relate to expenses in producing goods and services. The expenses can be fixed or variable.

(b) Revenue budgets – They project earnings from sales and other business activities.

(c) Profit budgets – They are the projections of profits. Profit is the difference between revenue and expense budgets.

(ii) Financial budgets – These budgets facilitate the use of operating budgets. They predict the sources and uses of funds for carrying out various business activities.

They can be of the following types:

(a) Capital expenditure budgets – Capital expenditure means expenditure on fixed assets like plant and machinery, building etc. These budgets indicate the time when investments will be made and sources from where funds will be raised to invest in these assets.

(b) Cash budgets – They predict cash position over the budgeted period. Periods when there will be shortage and cash surplus can be known and adjustments can be made to raise or invest cash to ensure smooth flow of cash throughout the budgeted period.

(c) Balance sheet budgets – They project the structure of assets, liabilities and capital over the budgeted period.

Budgets can further be classified as sales budget, production budget, materials budget etc.

Business Management Interview Question # Q.48. What is the difference between formal and informal communication?

Ans. Formal Communication:

1. Official and authentic channel

2. Planned and systematic

3. Charts depict formal routes

4. Focus on organisational goals and tasks

5. Fairly inflexible, rigid and prescribed route through which messages flow up and down

6. Official channels process information slowly

7. Impersonal way of sending messages, and

8. If messages are structured properly, very little chance of distortions.

Informal Communication:

1. Unofficial channel

2. Unplanned and spontaneous

3. Grapevine can take any direction

4. Emphasis primarily on individual needs and aspirations

5. Very loose, flexible and unpredictable routes

6. Messages pass through various routes at a stunningly faster rate

7. Personal and social, and

8. Rumours have no basis; they spread like wild fire and as such subject to loose interpretation.

Business Management Interview Question # Q.49. What are the characteristics of co-ordination.

Ans. The characteristics of co-ordination are as follows:

1. Coordination Secures Unity of Action:

To unite all activities of business and to provide unity of action, effective leadership is an indispensable function, because the concept of coordination is closely related to the concept of leadership.

2. Coordination Controls Conflict:

An enterprise contains people with different backgrounds, points of view, values needs and personalities interact with each other for something or the other. In such a case, a variety of conflicts often develop. Interpersonal conflicts are serious problems to many people because they deeply affect a person’s emotions. Similarly, intergroup conflicts between different departments also cause problems.

For example, the production department may want new efficient machinery, while the sales department wants to expand its sales force, but there are only limited resources to supply the needs of one group. Hence, to control conflict, organization must focus attention on coordination as a continuous and never ending process and bring about balance, stability and harmony.

3. Coordination Identifies Individual Effort towards Group Effort:

Though coordination applies to group effort and not to individual effort, it involves a sense of identification of individual effort towards group efforts because coordination is synchronizing the efforts.

Business Management Interview Question # Q.50. What are the advantages of flat organisation structure?

Ans. i. It can shorten the line of communication between the bottom and the top levels.

ii. Communication route is simple, direct, and clearly apparent to the individuals.

iii. Flat structure adopts management by results and it results in a high morale of mana­gers.

iv. Flat structure puts a premium on management deve­lopment and training programme.

v. Total executive payroll may be lesser due to relatively limited number of managers.

vi. We have limited number of levels of management and hence, direct and short chain of command.

vii. Flat structure is very suitable for a business horizontally developed, e.g., multiple shops or chained stores.

Q.51. Tell me the difference between administration and management.

Ans. Administration:

(i) It is higher level function

(ii) It is concerned with the formulation of policies and decision making of the organization

(iii) It refers to the owners.

(iv) Decision making is influenced by the social, economic and political factors organization to accomplish objectives.

(v) It acts through management


(i) It is lower level function

(ii) It is concerned with the execution of policies laid down

(iii) It refers to the employees.

(iv) Decision making is restricted to the extent of guiding and directing an

(v) It acts through the organization

Q.52. What’s your view on rational decision making?

Ans. Rational Decision-Making contributes the following significance to organization:

1. Managers who use a rational, intelligent and systematic approach are more likely to come up with high quality solutions to the problems they face than the ones who do not use this approach.

2. Rational decision-makers have a clear understanding of alternative courses of action to accomplish a goal under a particular set of circumstances.

3. Rational decision-making is based on the information available with the decision-makers and their ability to evaluate alternatives.

4. Rational decision-making aims at deciding the best solution by selecting the alternative that most effectively facilitates goal achievement.

Q.53. What are the characteristics or features of a decision?

Ans. The important characteristics or features of managerial decisions are as follows:

(1) It is normally rational and based on reason:

A manager must have calculation, reasoning and deliberation before he arrives at any final solution or decision or choice to any problem.

(2) It is selective and involves selection of the best:

A manager must apply intelligence while selecting the best course from among the available alternative courses.

(3) It is usually purposive and relates means to the end:

The manager must know that the solution to any problem provides an effective means to the desired end or goal.

(4) It is normally positive but we have even a negative decision:

It means a decision not to act. For example – a Car manufacturing company decided not to change the model and size of the car though the other rival company was planning to introduce a new model every year. Sometimes, a negative decision is also important.

Q.54. Give reasons for non-acceptance of delegation.

Ans. i. Fear of criticism for mistakes may lead a subordinate to be cautious and play it safe. He has a feeling, ‘why should I stick my neck out for this boss?’

ii. When a subordinate be­lieves that he lacks needed information and resources to do a good job, he may have hesitation to accept new assignment.

iii. A subordinate may lack self-confidence which cannot be ordered by a boss. The manager must help his subordinate to discover his own potentialities. One has to develop self-confi­dence only himself. It cannot be ordered.

iv. Making a wise decision is a hard task. Hence, a subordinate finds it easier to ask the boss in many problems. He is also less liable to suffer criticism for consequences later while following the decisions of his boss. Under such cases the boss must insist on the sub­ordinate to make decision. He may only give advice as a coach.

v. Positive motivation may be required. A subordi­nate may desire many incentives for assuming new responsi­bilities. Both tangible and intangible rewards may have to be offered, e.g., pay rise, better chances of promotion, fancy title, acknowledged status in the organisation, personal recognition and approval by boss, etc.

Positive incentive or motivation tends to enhance employee satisfaction. Negative motivation such as threat of punishment or unemployment threatens to reduce employee satisfaction. In democratic management there is no scope for negative motivation.

vi. The subordinate may already have more work than he can do. If he already feels overburdened, he will be unwilling to accept new assign­ments which call for thinking and initiative.

Q.55. Tell me about the importance of departmentation:

Ans. 1. Departmentation is to provide for specialization and to overcome the limitation on the number of persons that a superior can directly control.

2. It is a basis for expansion of an organization.

3. It helps in enhancing the overall efficiency of the organization.

4. It helps in allocating the work and defining the responsibility.

5. It provides an opportunity to employees to take initiative as their attention is focused on specific activities.

6. It provides on the job training and enabling them to identify the areas where they require development.

7. Freedom to take decisions motivates the managers and leads to better performance.

Q.56. Differentiate between co-ordination and co-operation.

Ans. Generally these two terms are very confused term in the management. Actually co-ordination can’t be achieved without cooperation. Cooperation means willingness of people to help each other.

The main points of differences between these two terms are given below:


1. It is the essence of management and very important for the success of managerial function.

2. Co-ordination is necessary in all inter­dependent activities of the organization.

3. Co-ordination is deliberate and intellectual efforts of a manager.

4. Co-ordination is broader in scope.


1. It is not the essence of management but very important for the success of coordi­nation.

2. The individual may learn to cooperate with each other even though their activities may not be related.

3. Co-operation is voluntary.

4. Its scope is narrow.

Q.57. Who are managers?

Ans. Managers are the most valuable assets of an organization. They assemble re­sources, set goals, decide priorities, organize and coordinate effort and get things done through and with people. They are the ‘coordinators’ and ‘directors’ in the organization. They are the individuals charged with examining the workflow, co­ordinating efforts, meeting goals and providing leadership.

In terms of authority, managers possess the right to command others in their areas of responsibility. Each manager reports to someone higher in the organization in what constitutes a theoretical chain of command from the top to the bottom of the structure. Man­agers usually do not directly perform any of the workflow activities.

They are there to direct, coordinate and assist others in completing the assigned work in a competent manner. They are also the activating elements that provide leadership and rewards to get results. They try to translate ideas into concrete action plans and produce results. When they succeed, they are able to keep everyone in good humour—including shareholders, employees and the general public.

When they hit the bull’s eye, they become the invincible corporate heroes and are sought after everywhere. When they fail, scarce corporate resources would have been squandered away and shareholder wealth would get decimated within a day (as it happened in Enron’s case) corporate failures are directly attributed to managerial incompetence and inept handling of situations.

The outcomes of managerial actions, thus, are going to be deep, profound and decisive. To survive and flourish in this economic jungle, managers are expected to innovate continually and deliver value to customers better than rivals.

Q.58. What are the essential features of MBO?

Ans. 1. They are established for striving towards certain objectives.

2. MBO focuses on goals and their achievement. This is a big step towards effective management.

3. It is a policy of participative management.

4. MBO tries to relate the long-range goals of the organization with the short-range goals. Overall system goals with the goals of the various sub-systems and the organizational goals with the goals of society.

5. MBO places emphasis not merely on goals, but on effective performance and tangible result also.

6. The philosophy of MBO view organizations as dynamic entities.

7. The technique of MBO recognizes the fact that the setting and achievement process is a co-operative and participative Endeavour.

8. Effective management of organizations is possible when managers at all levels have the required authority, responsibility and accountability for getting things done and for producing results.

Q.59. Explain the principles of Management by Exception (MBE).

Ans. Management by exception is an important principle of organisational control put forward by the classical management writers. This principle logically refers to the size of deviations from the standards only in the critical control points or areas. It has been devised to conserve managerial time effort and talent and apply these in more important areas.

It is a technique of separating important information from the unimportant information. Only such information which is critical for management control actions is sent to the management. This facilities the installing of an effective control system.

In this system minor deviations from the standards are given less attention. But in some cases, small deviations may mean a great deal and have greater significance than large deviations in other cases.

For Example – Management will be more concerned if the cost of labour is five per cent more than the budgeted labour-cost as compared to cost of postage stamps which is fifteen per cent more than the budgeted one.

So the principle of management by exception must be practiced in conjunction with the principle of critical point control. Management should be selective in exercising control. It should select key areas of activity on which the performance of the entire organisation depends and concentrate more on these areas.

Q.60. What are the objectives of management audit?

Ans. Management audit is conducted to attain the following objectives:

1. To appraise managerial efficiency with respect to objectives, policies and procedures of the organisation.

2. To assess whether organisational policies are being followed or not.

3. To evaluate management’s performance with respect to standard performance.

4. If actual performance deviates from standard performance, to find out causes for the same.

5. To suggest remedial measures to remove deviations and improve managerial performance.

6. To assess whether or not the enterprise is adapting to technological changes.

7. To assess whether or not return on capital is satisfactory, vis-a-vis other companies.

8. To assess corporate image in the national and international markets.

Management Interview Questions and Answers # Business Related Interview Questions:

Q.61. What are the functions of leaders?

Ans. Leaders perform a variety of functions while trying to realise the organisational goals.

These may be briefly stated thus:

i. Leader Develops Teamwork:

A leader shows the path and creates a conducive environment for others to work with zeal and commitment. Leaders encourage employees to work collectively and achieve the goals.

ii. Leader is Linking Pin:

As linking pins leaders strike rapport between subordinates, management and external groups. They carry the voice of the subordinates to the top management and to the outside world.

iii. Leader is an Appropriate Counselor:

Leaders listen to employee griev­ances, suggestions and viewpoints. They offer advice, counseling and emotional help when required. They offer a finger to hold on and a shoulder to cry on when the situation demands. They do everything possible to remove hurdles that come in the way of the performance of subordinates.

iv. Leader Uses Power Properly:

If a leader is to effectively achieve the goals expected of him, he must have power and authority to act in a way that will stimulate a positive response from the workers. No leader is effec­tive unless the subordinates obey his orders. Therefore, the leader uses appropriate power so that the subordinates willingly obey the orders and come forward with commitment.

v. Leader Uses Time Well:

Time is precious but often overlooked in management. A leader uses his time productively by following time-preparation-charts, scheduling techniques, etc. Information, facts and statistical inputs are combined effectively so as to produce timely decisions.

vi. Leader Strives for Effectiveness:

Leaders take certain conscious decisions in order to achieve goals effectively. In addition to the functions, they carry out additional activities to reach the targets in time. They delegate work, invite participation from subordinates, offer proper rewards for good performance, mix up with subordinates and enforce discipline and control whenever necessary.

Q.62. What are the characteristics of directing?

Ans. 1. It is an important function of top management. It alone can initiate action in the organization. Hence, the directing function is broader in scope.

2. It is performed at every level of management. It runs down the organization in a chain of command. It is the superior who directs a sub-ordinate direct his superior.

3. It is not a mere mechanical activity of passing orders and issuing instructions, byt motivating, leading, supervising, communicating and inspiring sub­ordinates.

4. It is an important instrument to improve efficiency and productivity.

5. It is an interconnecting mechanism. It interconnects the mutually dependent aspects of motivation, leadership, supervising and communication

6. It is a continuous process.

Q.63. Tell me the difference between MIS and DSS.

Ans. Though both MIS and DSS are computer-based systems that provide information for making decisions, there are following points of difference between the two:


1. Managers can only have access to information in MIS. Information can be stored and retrieved in MIS.

2. Managers have to wait for information till they get it from the MIS department.

3. It helps in making routine decisions in structured situations, like preparing monthly sales report or annual profit and loss account.

4. It provides information. It is an information provider.

5. It is relatively inflexible.


1. Managers can manipulate information in DSS. They can think of possible problems and their solutions.

2. Managers get the information when they want. DSS is operated directly by its users through on-line system.

3. It helps in making non-routine decisions in unstructured situations.

4. It is a decision-making tool.

5. It is more flexible than MIS.

Q.64. What are the features of a good plan?

Ans. Some kind of planning is very much a part, of every man­agerial act as breathing is a part of living. Every plan laying down precisely a future course of action is a managerial deci­sion taken today for tomorrow, a good plan, according to L. F. Urwick, a noted management authority, must have the following features-

(1) A good plan is based on clearly defined objectives -overall corporate objectives as well as functional and/or indi­vidual objectives, i.e., precise objectives of the departments as well as the individuals working in the departments.

The man­agement by objectives (MBO) is now the most widely applied method of planning under which objectives, policies and plans are set at all levels of management through meaningful parti­cipation between the boss and the subordinate officer through­out the enterprise.

(2) A good plan is simple and easily under­standable.

(3) It is flexible or adaptable to deal with new con­ditions.

(4) It is balanced in all respects and gives equal em­phasis to all vital areas of business.

(5) It provides for a pro­per analysis and classification of actions, i.e., it establishes necessary guides and standards of performance.

(6) It uses the available resources to the utmost before creating new re­sources and a new managerial setup.

(7) It is viable or feasi­ble and, reasonable.

The best test of effective planning is its realistic and viable nature. A good plan must be pragmatic and must lead the organisation forward on the path of progress and prosperity.

Q.65. Tell me the meaning of the term ‘business.

Ans. A business refers to being engaged in commercial activities in an industry. This in turn means, any entity (an individual or a group of individuals) involved in producing and/or distributing goods and services in a market. The main objective of a business is to achieve private gain, which can either be in form of wealth (profit), or welfare (happiness, well-being, health, etc.) or both.

Businesses attempt to cater to human wants which grow continuously. Businesses can provide satisfaction and can improve standard of living of consumers. Businesses allocate resources like land, machinery, raw materials and human resources leading to employment and income generation. Businesses can also generate employment and income indirectly for other businesses in other industries. They create opportunities for qualified and educated individuals to contribute through innovative and creative ideas to cater to human demands and desires.

Accordingly, they promote the need for educational and recreational institutes that develop knowledge and skills in the society. Businesses also provide support to government by paying corporate taxes, provident fund for employees, registration of new companies, submission of financial information of business to the Ministry of Corporate Affairs (MCA), environment permits, customs and duties paid by businesses. The government in turn utilises the money in its administration, which in turn (ideally) work towards developing infrastructure (roads, ports, railways, etc.), education, health, insurance, regulatory and policy formulations for businesses to grow within an economy. Businesses in a particular one industry generate linkages with several industries that have a cumulative effect on the economy.

Q.66. What are the steps involved in decision making?

Ans. In order to make proper decision, following a systematic procedure is more desirable than trying to solve it in a haphazard manner.

The steps which should be taken to arrive at the right decision based on the relevant information are:

1. Define the problem in proper perspective.

2. Identify the various alternative courses of action leading to the proper solution.

3. Build the rule, based on which the decision would be evaluated. For example, one may say that the Internal Rate of Return (IRR) method would be used to appraise the investment decision. This procedure or technique would then be called the required Decision Rule for solv­ing that problem. The Decision Rules specifies how and which infor­mation would be used in what manner to evaluate the alternative course of actions available.

4. Get the information required to apply the decision rule.

5. Identify the data available from which the required information could be obtained after processing.

6. Select the method and steps of processing, including the algorithms involved.

7. Gather the data, process it as per the previous step, generate the information, apply it to the decision rule and then evaluate different options and, decide.

Q.67. What are the objectives of scientific management?

Ans. Taylor through his principles of scientific management initiated a system in which there would be an effective and fruitful co-ordination and co-operation between the management and the workers. The horizon of scientific management is so wide that it includes in itself the labour, materials, power, time and above all social expectations which any management is required to fulfill. Keeping such a large vision in his mind.

Dr. James has enumerated the following objectives of scientific management:

(1) To make provision for the use of knowledge and skill of production.

(2) To standardise the plants, tools, materials and working conditions so as to raise the level of production.

(3) To revolutionise the whole process of production and marketing including purchase, sale, production procedure, plant and machinery, accounting, materials management etc.

(4) To reduce the possibility of slackness in production accidents etc.

(5) To help in proper guidance and leadership, regular and adequate direction on proper lines, timely communication, better co-ordination, mutual respect, good human relations and fruitful co-operation.

(6) To conduct surveys and organise researches so as to make the management a living and result-yielding science.

(7) To help the labour in overcoming his difficulties and solve their organisational as well as domestic problems in a manner in which he feels satisfied and prepares himself for hard and selfless but rewarding work.

(8) To help all round mental, physical and technical development of the workers.

(9) To help increase in the levels of wage, profit and consumers service of the highest degree.

(10) To effect new and scientific technique in production; and

(11) To serve the enterprise, the economy, the nation, and the society in a manner in which the society expects.

Q.68. What is the difference between between employee motivation and morale?

Ans. Though motivation and morale are closely related (high motivation leads to high morale), there are significant points of difference between the two.

These differences are explained below:


1. It aims at satisfying needs of human beings.

2. Motivation is reflected in a person’s attitude towards his job.

3. High motivation leads to high morale.

4. Motivators can be positive or negative; both promote the performance of workers.

5. Motivation may or may not be present in a person, that is, a person may or may not be motivated to work towards organisational goals.


1. It is the attitude of a group towards the work and work environment.

2. Morale is reflected in a person’s attitude not only towards his job but also towards his organisation, work environment, peer group, superiors and subordinates.

3. High morale may not lead to high motivation.

4. Only positive or high morale improves workers’ performance. Negative or low morale normally reflects low commitment towards the job.

5. Morale is always present in individuals, it only varies in degree. There may be high or low morale but no situation represents absence of morale.

Q.69. What are the factors affecting organisational behaviour?

Ans. 1. People:

People are the internal social systems of the organisation. This system consists of individuals and groups.

A. Groups can be:

i. Official

ii. Formal

iii. Unofficial

iv. Informal

v. Large

vi. Small

B. Groups are Dynamic:

They form, change and disband.

People are the living, thinking, feeling beings who work in the organisation to achieve their objectives.

The human organisations have become more diverse now with people bringing in a range of educational backgrounds, talents and perspectives to their job. The manager has to deal with and adapt to them.

2. Structure:

Structure defines the formal relationship and use of people in organisations. People have to be related in some struc­tural way so that their work can be effectively coordinated. Organisation structures are becoming flatter mainly as a re­sult of pruning middle level management.

3. Technology:

Technology provides the resources with which people work and affects the tasks that they perform. Technology allows people to do more and better work. Technological advance­ments places increased pressure on Organisation Behav­iour to maintain the delicate balance between technical and social systems.

4. Environment:

All organisations operate within an internal and external en­vironment. Organisation is a part of larger system that con­tains elements such as government, family and other organisations. Changes in the environment influence the system. External environment influences the attitude of people, affects working conditions and provides competi­tion for resources and power.

Q.70. What’s your view on the nature of motivation? 

Ans. The term motivation is derived from the Latin word ‘mover’ which means ‘to move’.

The concept of motivation implies:

(a) The contemporary influence on the direction, vigour and persistence of actions;

(b) How behaviour gets started, is energised, is sustained, is directed, is stopped and what kind of subjective reaction is present in the individual’s mind, while all this is going on; and

(c) A set of independent or dependent variable relationships that explain the direction, amplitude and persistence of an individual’s behaviour holding constant the effects of aptitude, skill and understanding of the task and the constraints operating in the environment.

Three common denominators of motivation pertain to:

1. What energises human behaviour?

2. What directs and channelises such behaviour?

3. How is this behaviour maintained or sustained?

Q.71. Who is a Leader?

Ans. A leader is a person who guides and directs others, called followers. Throughout history it has been recognised that the success or failure of a war, political movement, business or games can be largely attributed to leadership. According to Koontz and O’Donnel Leadership is the ability of a manager to induce subordinates to work with confidence and zeal.

Leadership can be segregated in various leadership style i.e. Autocratic, Democratic, Laissez faire, functional, institutional and paternalistic. From these styles and style can be obtained by a leader, but the style obtained should be best suited to the subordinate and to the type of school management. It is must to study the various leadership styles from which an appropriate style can be choose.

Q.72. What are the characteristics of business organisation?

Ans. The principal characteristics of a business organisation are given below:

1. Separate Identity:

Every business organisation has a separate identity. It is recognised by different names. The existence of one business organisation is different from the existence of another organisation. Each business undertaking has its own assets and liabilities. Its accounts are different from those of its owners.

2. Independent Ownership:

A business undertaking is owned by the people who have pooled-in capital for its functioning. The owners may be private individuals or the government. If the capital is contributed by private individuals, it is known as a private sector organisation. On the contrary, if the capital is supplied by the government, it is called a public sector organisation.

3. Independent Management:

Each business undertaking has its own management which exists and functions independently. The management of one undertaking cannot interfere in the functioning of another undertaking. The management of a business undertaking varies according to its nature, size and legal requirements. The management of an undertaking takes decisions on its own concerning the day to day operations, quantity and quality of goods to be produced, pricing, marketing strategies, post-sale follow-up etc.

4. Element of Risk:

Risk bearing is a part of business. Every business undertaking involves risk. The risk of a business undertaking has to be endured by its owners and some of the risk can be covered by insurance. However, the reward for risk bearing is profit which fructifies the effort of business owners.

Q.73. What are the features of economic activities?

Ans. The main features of economic activities are as under:

i. Economic Motive:

Economic activities are undertaken to earn money. The primary objective of such activities is to make an economic gain, acquire wealth and to earn livelihood.

ii. Creation of Utility:

Economic activities revolve around production, exchange, consumption and distribution of goods and services to satisfy human wants. They create utilities of form, place, time and possession resulting in the production of wealth.

iii. Economic Growth:

The economic activities undertaken by a nation decides the level of economic development in an economy. They also boost the standard of living of the citizens in any country.

iv. Optimum Use of Resources:

Economic activities demand optimum allocation and proper utilization of resources such as land, labour, capital and other factors of production so as to get the maximum output. The society can be best served by rational use of the available resources.

v. Lawful:

Only lawful activities performed for economic gain are called economic activities. Legally agreeable economic activities must aim to improve economic standard of the people in the country. Illegal activities such as black-marketing, hoarding, gambling etc. cannot be categorized as economic activities because they do not serve the public interest.

vi. Socially Desirable:

Economic activities should be in harmony with the expectations and rules of the society. They should not harm the sentiments of any religious group, caste, ethnicity or gender.

Q.74. Differentiate between mechanistic and organic organisation structures.

Ans. Tom Burns and GM. Stalker differentiate between two kinds of organisation structures:

I. Mechanistic or Classical Organisation Structure:

This is a formal organisation structure with well-defined jobs, policies, schedules, chain of command, authority-responsibility structure and vertical communication. The organisation and its members emphasise on organisational and individual goals with very little or no interaction with the environment.

II. Organic or Behavioural Organisation Structure:

These structures are adaptive to environmental changes and prefer participative system of decision-making to vertical authority-responsibility relationships. Communication is both vertical and horizontal and control is self-imposed.

Q.75. Give some examples of non-economic activities.

Ans. 1. Sympathy:

A person tending to an injured animal or bird.

2. Love and Affection:

A mother cooking and looking after the daily needs of her children.

3. Physical Needs:

Young and old people attending the gym to stay fit.

4. Religious Obligation:

People observing fasts, praying at the temple and offering daily oblations to the divine entities.

5. Social Obligations:

Money donated by citizens of a nation to help earthquake or flood victims.

6. Humanity:

Blood or organ donated by one person to save the life of another.

Management Interview Questions and Answers # BBA Interview Questions:

Q.76. Tell me the difference between investment and gambling.

Ans. The difference between investment and gambling is very clear. Investment is an attempt to carefully plan, evaluate and allocate funds in various investible outlets, which offer safety of principal, moderate and continuous return and long-term commitment. Gambling is quite the opposite of investment. It connotes high risk and the expectation of high returns.

It consists of uncertainty and high stalkers for thrill and excitement. Typical examples of gambling are horse riding, game of cards, lottery. Gambling is based on tips, rumors and hunches. It is unplanned, non-scientific and without knowledge of the exact nature of risk.

These distinctions between investment, speculation and gambling give us a basic idea of their nature, purpose and role.

Q.77. What is the difference between Organisation Development and Management Development?

Ans. The distinctions between the two are as follows:

(1) The term Organisation Development is wider and this will include management development.

(2) Organisation development purports to change the organisational environment where the individual works, but management development aims at developing the managers individually for the accomplishment of better performance in organisational settings.

(3) In practice, in organisation development efforts organisation structure may change when the need arises and in the management development efforts the man may have to adapt new ways of behaviour.

(4) Thus, both are complement rather than conflicting. Generally organisation environment seeks to improve the entire system including the management development.

Q.78. What are the objectives of control?

Ans. Control fulfills a number of organisational purposes:

1. It makes certain that goals and plans are being followed.

2. It maintains effective coordination between objec­tives, standards and results.

3. It helps bring consistency to the activities through­out the organisation.

4. It can help bring individual behaviours in line with organisational goals.

5. It identifies deviations and their reasons. It serves as yardstick for evaluating performance.

6. It provides a base for future planning and future actions.

7. It sets the pace of progress, governs operations and produces the desired results.

8. It ensures a maximum utilisation of physical and human resources.

9. It keeps inventories within limits so that a minimum amount of capital is invested in inventory.

10. It prevents negligence of duty, corruption, wastage, inefficiency and non-conformation of work.

11. It maintains discipline and cooperation among em­ployees.

Q.79. What is the purpose of communication?

Ans. The main purpose of communication is to effect change in someone i.e., to influence action or to secure action in the overall interest of an enterprise. It enables us to understand others and to make ourselves understood.

Without communication we cannot live or work together in an organised way. It is a flux that binds people together in an organisation. The basic purpose of communication is to facilitate and lubricate the organisation. It helps management in planning effectively and controlling efficiently.

John G. Clover has outlined the following important purposes of communication:

1. To keep employees informed.

2. To provide employees with orders and instructions in connection with their duties.

3. To solicit information from employees which may aid management?

4. To make each employee interested in his respective job and in the work of the company as a whole.

5. To express management’s interest in its personnel.

6. To reduce or prevent labour turnover.

7. To instill each employee with personal pride in being a member of the company.

Q.80. What kind of planning practices are followed in Japan, USA and China?

Ans. Different countries follow different management practices influenced by several factors including the culture of the country. Productivity levels in Japan are higher than that of USA which is primarily due to the Japanese culture of collectivism. Most of the USA companies started adapting Japanese management practices.

Planning in Japan:

Government and business through their joint efforts undertake planning for economic growth and international competitiveness. These plans enabled for harmonising monetary, fiscal and human resource policies and for developing industrial sector.

Thus the economic environment has become predictable to the businesses for planning. Consequently decision making, selecting objectives, formulating goals and strategies have become less risky. Japanese emphasise on long-term goals rather than short- term.

Planning in USA:

In contrast to the Japanese managers, American managers plan for short-term result as they are under pressure from the stakeholders to report for profits every year. Added to this, American managers frequently change their jobs. The plans of government and business are not in collaborative effort as in Japan. Therefore, complete certainty in predicting the future is not possible.

Planning in China:

Most of the Chinese businesses are under state ownership. Only some private companies entered the market recently. Chinese businesses plan for both long-term as well as short-term. Top level at the Government, State Planning Commission prepares 5-year plans and businesses prepare their plans accordingly.

Lower level managers prepare short run plans based on the long-term plans. Chinese think strategically, even though they may not prepare strategies formally. Chinese use alliances in their planning process. Organisational goals and individual goals are not aligned completely as the achievement of organisational goals may not contribute to the achievement of individual goals/plans.

Q.81. Why should organisations change its objectives?

Ans. Generally organisations tend towards stability. Even then, their objectives change over time. Objectives may change on the basis of gap between expected and desired states. These expected and desired states are influenced by some factors. These factors would lead to different perceptions regarding the gaps between goals and how the future goal states might be arrived at.

The following are the reasons for change in mission and objectives:

(i) Change in Goal Orientation:

The goal orientations are altered by the aspiration levels of managers. The managers’ aspiration levels change from time to time based on the past achievements of the organisation.

(ii) Crisis Situations:

The crisis situations like economic liberalisation or any other change due to shift in government policy force the organisations to change their mission. Therefore, the organisations adapt their mission and objectives to the conditions of crisis situations.

(iii) Changes in the Demands from Coalition Group:

With changes in the strengths and weaknesses of the members of the coalition group and changes in the opportunities and threats of the external environment, the members change their interest. In addition, change in the government policies and international environment change the power configuration of the group. These changes make the enterprise shift from its state to the new state of business. This brings change in the mission and objectives of the enterprise.

(iv) Changes in the Normal life cycle of the Enterprise:

As the life cycle of the human beings have different stages, the life cycle of the enterprise also has different stages. As the goals of human beings undergo changes from one stage to another, the mission and objectives of an enterprise also undergo changes from one stage to another of its life cycle due to changes in aspiration, needs etc..

Q.82. What are the essentials of Management by Objectives (MBO) programme?

Ans. Management by Objectives seeks to integrate the firm’s objectives with individual goals and satisfaction of its managers.

The essentials of the MBO programme are:

(i) Regular critical review and restatement of an organisation’s overall tactical and strategic plans.

(ii) Clarification with each manager of his key results and performance standards.

(iii) Acceptance by each manager of his contribution and commitment to these results and standards.

(iv) Establishment of strict procedures for control and self-control of progress, performance and potential review.

(v) Provision of imaginative MBO development programmes.

(vi) Provision of conditions in which these results can be achieved –

a. An effective organisation and

b. Sound managerial control information.

Q.83. Tell me about the traditional process of decision making.

Ans. Decision making process involves identification of the problems, searching the environment for conditions requiring a decision, developing and analysing possible alternatives selecting the best alternative solution and execute the solution to achieve the objectives/goals or solve the problem.

The steps involved in the process of decision making are:

(i) Identification of problem(s) to be solved or determination of objectives to be achieved.

(ii) Searching the environment for conditions requiring a decision.

(iii) Developing the possible alternative solutions.

(iv) Analyzing each alternative solution in terms of its ability to solve the problem or to achieve the determined objectives.

(v) Selecting the best alternative solution.

(vi) Executing the solution to solve the problem or to achieve the objectives.

Earnest B. Archer proposed a nine-phase decision process.

Q.84. What are the potential benefits of group decision making?

Ans. The counter and encounter process of the group activity over the ideas and issues lead to creativity and innovation. Creativity provides competitive edge to the companies over the competitors. Creativity is the process of combining responses or ideas of individuals or groups in novel ways.

The group activity through brain storming, active involvement and interaction may result in creativity and innovation. Divergent thinking is a person’s ability to generate novel but appropriate responses to questions and problems. It may lead to creativity.

Group decision making is normally superior to individual decision making as:

a. The sum total of the group’s knowledge and skill are greater.

b. The group has a much wider range of alternatives in the decision process,

c. The impact of synergy and

d. It facilitates and enhances acceptance of the decision by group members-particularly in strategic issues.

Q.85. How to make delegation effective?

Ans. The problem of delegation is essentially one of human leadership.

Hence, the management has to create appropriate climate, allow the others to develop, should have faith in the subordinates’ ability and educate them to overcome fear:

i. Management should establish clear-cut goals and define authority and responsibility clearly, motivate the subordinates through stimulation, group cohesiveness, organisational influences, appropriate leadership, counseling and communication.

ii. Delegation should be complete when arrangements are made for guidance, coaching, supervision, direction, communication and control.

iii. Managers who delegate authority should make a clear-cut assignment, delegate the details of coordination, specify progress information needed, provide counseling, guidance and adequate training which should be followed up by appraisal of current performance, counseling for improvement and coaching on the job.

Another concept that influences the organisation design is centralisation and decentralisation, which is close to delegation.

Q.86. What are the features of direction?

Ans. i. The end of direction is achievement of enterprise plans and objectives.

ii. Direction techniques are: issuing orders, instruments and commands and inspiration of people.

iii. Leading the subordinates and

iv. Motivating, guiding and inspiring the employees to utilise their human resources to the maximum extent.

Q.89. What’s your view on the relationship between planning and control.

Ans. There is a special close relationship between plan­ning and controlling. Planning and control work hand-in- hand in organisations. Planning identifies commitments, while controlling is performed to achieve these commit­ments. The two supplement each other. Planning without control is only a paper exercise and control without planning is irrelevant.

According to Koontz and O’Donnell, “Planning and control are inseparable—the Siamese twins of management. Unplanned actions cannot be controlled, for control involves keeping activities on course by cor­recting deviations from plans. Any attempt to control without plans would be meaningless since there is no way anyone can tell whether he is going, where he wants to go—the task of control, unless first he knows where he wants to go—the task of planning. Planning furnishes the standards for control.”

Q.90. What are the barriers to communication?  

Ans. Communication failure may be caused due to certain barriers. Failure to communicate effectively may cause disruption or delays in achieving targets.

Communication failures may be caused due to many reasons:

1. Lack of Planning:

What needs to be communicated, how, and when if not properly thought out and planned which leads to creating barriers in communications. If a message is communicated without adequate planning, then the desired result may not be obtained.

2. False Assumption:

Many a times, the sender starts with several assumptions which may not be true. Leaving out relevant details in the communication assuming that receiver is already aware of it may create a barrier in communication.

3. Ambiguity:

There are several words which may not be known to the receiver in the way it is known to us. Same words or expressions are interpreted in different way. A wrong message can be send as a message yield more than one meaning.

4. Distortion:

Distortion usually occurs because either the receiver is preoccupied in his own thoughts or due to several external forces like it. Any type of distortion may create a barrier to communication.

5. Passing Judgments:

We are usually in a habit of passing judgments on whatever we hear or see without considering its background or listening to the message completely.

6. Implied Meaning:

The background of the sender and the receiver is different hence the message send may be assumed differently by both of them.

7. Lack of Trust:

The relation between the sender and the receiver plays an important role in communication. Lack of trust between both of them may create a communication barrier. Both of them will tend to treat the information with suspicion.

Q.91. Tell me about the concept of entrepreneurship.

Ans. Entrepreneurship refers to the creative and innova­tive skills and decisions in the business. It is the ability and readiness to take risks, to organize the factors of production and to mobilise them in the process of growth. It is the eagerness to set-up new enterprises in a society.

It can be described as ‘innovativeness’. It is a leader­ship rather than ownership. Howard Johnson says that entrepreneurship is a composite of three basic elements—invention, innovation and adaptation. Peter Drucker states that maximisation of opportunities is meaningful in business, indeed a precise definition of the entrepreneurial job. It is a social decision making per­formed by economic innovators.

Stoner says that the process of creating new organisations is known as ‘entrepreneurship. According to Jon Pierce, “Entrepreneurship is the development of a product or service idea and the creation of an organisation to further its growth.”

The word “entrepreneur” is derived from the French verb entreprendre. It means “to undertake”. Entrepre­neur is a person who organises and direct the productive factors. He transforms ideas into aprofitable business. He “adventures’ risks. Franz says that the entrepreneur is more than a manager. He is an innovator and promoter as well. According to Drucker, “He always searches for change, responds to it, and exploits it as an opportunity.”

Q.92. What makes an entrepreneur?

Ans. Entrepreneurs must possess certain abilities, moti­vations, and attitudes in order to succeed. They must have the skills of the business manager as well as self- confidence and the ability to control their own fate. Successful entrepreneurs conceive business visions and turn them into business realities.

George Gilder sug­gests that “entrepreneurs prevail not by understanding an existing situation in all its complexity, but by creating a new situation which others must try to understand. Entrepreneurs inhabit a world where the last becomes first, where supply creates demand, where belief precedes knowledge.”

According to Michael Armstrong, the particular char­acteristics of successful entrepreneurs are that they:

(a) Are action orientated?

(b) Have the ability to visualize the steps from idea to actualization

(c) Are prepared to ‘break the mould’

(d) Are both thinkers and doers, planners and workers

(e) Get involved—they adopt a ‘hands-on’ approach

(f) Can tolerate ambiguity—’enterprise always consists of action in uncertainty’ (Gilder)

(g) Accept risk but understand and manage it

(h) Overcome, rather than avoid mistakes—they don’t admit they are beaten

(i) See themselves as responsible for their own destiny- they are dedicated, setting self-determined goals

(j) Believe in creating markets for their ideas, not just in responding to existing market demands.

Q.93. How to foster innovation in an organisation?

Ans. To build up innovation, it is not necessary to hire and hold on creative people. In fact, everyone possesses some ‘creative potential’. It only requires developing a culture that supports and encourages every employee’s creative ability.

Stephen Robbins has described some factors which will help to create a climate that stimulates innovation:

1. Tolerance of risk – Employees are encouraged to experiment-without fear of the consequences should they fail. Mistakes are treated as learning opportuni­ties.

2. Low external control – Rules, regulations, policies, and similar controls are kept to a minimum.

3. Low division of labour – Narrowly defined jobs create myopia. Diverse job activities give employees a broad­er perspective.

4. Acceptance of ambiguity – Too much emphasis on objectivity and specificity constrains creativity.

5. Tolerance of conflict – Diversity of opinions should be encouraged. Harmony and agreement between indi­viduals and units are not assumed to be evidence of high performance.

6. Tolerance of the impractical – Individuals who offer impractical, even foolish, answers to “what if ques­tions are not stifled. What, at first, seems impractical may lead to innovative solutions.

7. Focus on ends rather than means – End goals should be made clear and individuals encouraged to consider alternative routes towards their attainment.

8. All-channel communication – Communication should flow laterally as well as vertically. The free flow of communication facilitates cross-fertilization of ideas.

Q.94. What are the features of entrepreneurship?

Ans. Entrepreneurship has the following fea­tures:

(a) It is an innovative and creative activity.

(b) It is a knowledge-based practice.

(c) It is not a personality trait, but a behaviour.

(d) It is result and environment-oriented.

(e) It is not a natural but an ‘achieved’ work.

(f) It is not simply adoption of a new activity or a practice. It is transformation of a person, his acquiring a new identity. 

(g) Nelson and Nech state, “Being an entrepreneur is more than a job or a career- it is a life-style.”

Q.95. How to make communication effective?

Ans. Dalton McFarland has suggested some ways to make communication effective:

1. Listen attentively; find areas of common interest; listen for main ideas.

2. Withhold value judgements about context or deliv­ery, until strategically appropriate.

3. Plan ahead; be prepared; avoid impromptu situa­tions if possible.

4. Keep messages brief.

5. Attend to behavioural cues as well as language or diction.

6. Avoid stereotyping and the assignment of individu­als or ideas to rapid categories.

7. Distinguish between the desire to know and the need to know.

8. Distinguish among facts, reference, and conclu­sions.

9. Avoid attributing motives to others.

10. Say enough, but leave some things unsaid.

It should be noted that the effective communication is the responsibility not only of the sender but also of the receiver of the information.

Q.96. Differentiate between management and leadership.

Ans. Leadership and management are often thought of as one and the same thing, but this is not valid. Leadership is a broader concept than management. Management is thought of as a special kind of leadership in which the achievement of organizational goals is important. Leader­ship occurs any time one attempts to influence the behaviour of an individual or group, regardless of the reason and direction. Leadership may not be congruent with organizational goals and may be for one’s goals.

John Kotter also argues that leadership is different from management, but for different reasons. He states that management is about coping with complexity. Lead­ership, in contrast, is about coping with change. Abraham Zaleznik argues that leaders and managers differ in motivation, personal history, and how they think and act. Zaleznik says that managers prefer to work with people, and relate to people according to the role they play in a decision making process. Leaders, who are concerned with ideas, relate to people in more intuitive and empathic ways.

Q.97. Tell me about the nature of leadership.

Ans. 1. Use of Influence – Leadership implies something more than mere supervisory responsibility or formal au­thority. It consists of influence. Leadership is the incremental influence, or additional influence, that a person has beyond his formal authority.

2. Importance of communication – Leadership is estab­lished through the communication process. Commu­nication affects the behaviour and performance of followers. The inability to communicate is a serious deficiency in influencing people.

3. Followership – The essence of leadership is followership. It is the willingness of people to follow that makes a person a leader. Leadership always involves followers. Just as there are leaders, there must also be followers.

4. Accomplishment of goals – Leadership directs the group activities towards goal achievement. The effec­tive leader has to deal with individual, group, and organizational goals.

5. Assumption of responsibility – The leader assumes full responsibility for all actions of his followers. He re­mains responsible in all situations.

6. Community of interests – This implies that the objec­tives of both the leader and his people are one and the same. Terry writes that “leadership is the activity of influencing people to strive willingly for mutual goals”.

7. Situational variable – Leadership is behaviour as well as situational outcome. It may be the result of inter­action of the leader with the members of his group in a particular environment.

8. Exemplary conduct – The leader shows the ideal behaviour for his people to follow. He sets an example before his men by his conduct.

9. Other features – (i) Leadership is the exercise of authority and the making of decisions. (ii) It is the process of creating a work environment in which people can do their best work. (iii) Leadership involves status differences as well as role differences. (iv) Leadership may exist on both formal and informal levels. In other words, leaders can emerge from within a group as well as by formal appointment to lead a group.

Q.98. What are the features of supervision?

Ans. The following are the salient features of supervision:

(i) Supervision is done at All Levels of Management:

Top management supervises the work of middle management which in turn supervises the work of lower management.

(ii) Supervision Aims at Guiding Subordinates in their Work Performance:

The act of supervision involves preparing work schedules, assigning work and work facilities for employees, issuing orders and instructions, inspiring subordinates for better and higher performance and controlling work output by comparing actual performance with work targets.

Q.99. How to develop an organisation structure?

Ans. Following steps can be of great help in designing a new organisation structure:

(i) Clear Definition of Objectives:

The first & foremost point of consideration while developing an organisation structure is to define clearly what the organisation objectives are.

(ii) Identify the Activities & Grouping them into Suitable Classes:

The activities required to achieve the organisation objective should be stated clearly, then similar kind of activities should be combined together & proper assignment of the activities to personnel should be done so as to get the best of coordination.

(iii) Determine the Structure:

The organiser has to decide the span of management, type of organisation, basis of Departmentation and pattern of authority for determining proper structure of organisation.

(iv) Revise the Structure:

Looking to available manpower resources & other conditions structure can be revised which should be real & efficient. So the last step is to assess the caliber and ability of the staff.

Q.100. What do you mean by supervision?

Ans. Supervision refers to the direct and immediate guidance and control of subordinates in the performance of their work. A supervisor is an effective link between workers and management. It involves observing the subordinates at work and ensuring that they are working according to the plans and policies of the organization.

Generally, supervisors deal with workers directly and are sometimes called ‘first-line managers’. His primary job is to manage the workers at operative level of management. George R. Terry and Stephen G. Franklin have defined supervision as “Supervision is guiding and directing efforts of employees and other resources to accomplish stated work outputs.”